In his New Year message to the German people, Chancellor Gerhard Schroeder has softened his stance against military action in Iraq, saying that sometimes force is necessary.

"We Germans know from our own experience that dictators sometimes can only be stopped with force," said Mr Schroeder, in a reference to his country's Nazi past.

We also know what bombing, destruction and loss of homeland can mean for people Chancellor Gerhard Schroeder

The televised address, to be broadcast on Tuesday, comes a day before Germany joins the United Nations Security Council as a non-permanent member, thereby gaining a say - but not a veto - on the council's actions in Iraq.

The chancellor's speech also tackled issues closer to home - warning Germans they are in for a tough time in 2003, as the government strives to revive the country's ailing economy, record unemployment levels and a gaping budget deficit.

Stressing the alternatives

In the latest sign he may be ready to compromise if necessary, Mr Schroeder refused to rule out German support for UN-authorised war.

Germany will soon have a vote on the UN's activities in Iraq

But he also said Germany would do all in its power to avoid military action, by trying to persuade Iraq to comply with UN disarmament demands.

"Germany owes it to its history to stress the alternatives to war," he said.

"We also know what bombing, destruction and loss of homeland can mean for people."

Last summer, Mr Schroeder's strident opposition to military action against Iraqi leader Saddam Hussein helped him narrowly win re-election.

But his definitive anti-war stance angered Washington, and as worldwide attention focuses on Germany as it takes up its role on the UN Security Council, the international pressure on Mr Schroeder has increased still further.

Tough times ahead

Turning to domestic issues, Mr Schroeder warned Germans of a bumpy ride ahead, says the BBC correspondent in Berlin, Katya Adler.

Germany need to get to grips with a sluggish economy

Few Germans will be surprised, as there is already a strong whiff of pessimism in the air, our correspondent says.

In a recent public opinion poll, two-thirds of those asked said they were worried about the future - and only one in four said they trusted Mr Schroeder to improve the situation.

The chancellor is using his New Year speech to try to allay their fears, promising that new government measures would help revive the economy.

But these measures will be painful, in the short term at least, including tax hikes and public spending cuts, our correspondent says.